ATMs look likely to be with us even longer than critics expected, with a new report predicting that there will be 1.2million worldwide by the year 2004: an increase of 35%.

Despite rumblings in the financial services industry to the contrary, the death of the ubiquitous Automated Teller Machine (ATM) has yet to be witnessed, and, moreover, according to a new report out by a London based banking research firm, its numbers will continue to proliferate worldwide.

The first cash dispensers were installed over 30 years ago and became a worldwide phenomenon in the late 1980s and 1990s— today, there are over 800,000 machines in operation. Speaking at the recent eBank 2000 conference in Dubai, Retail Banking Research’s (RBR) senior research consultant Mark Glover predicted that this number would grow to well over 1 million by the year 2004.

“Despite the proliferation of alternatives to cash payment, particularly cards, ATMs are set to grow in number over the next five years to approximately 1.2million machines,” said Glover. “In some countries you can expect this number to increase five fold or more. For manufacturers, this is a mature and increasingly competitive market and this means that there will be increasing pressure on margins.”

The largely US-based trend of banks adding more technical capabilities to their ATMs, such as showing movie trailers and Web browsing is also something that Glover expects to have an impact. He pointed out that despite the cost factor, both high-end and cheaper ATMs were likely to include chip card readers with full graphics colour screens, note recycling capabilities and, eventually, some means of biometric customer identification.

“Cash withdrawal still remains the main reason for ATM use, accounting for 70% of all transactions,” said Glover. “However there is a wide range of other services which banks in different countries have tried. These range from providing copies of ID certificates to buying tickets for sporting events. The Middle East can learn a great deal from looking at the experience of different countries that have already successfully implemented such services.”